Infonomics

Infonomics is the theory, study and discipline of asserting economic significance to information. It provides the framework for businesses to value, manage and wield information as a real asset. Infonomics endeavors to apply both economic and asset management principles and practices to the valuation, handling and deployment of information assets.

In the late 1990s, then META Group and now Gartner IT industry analyst Doug Laney coined the term Infonomics to describe his proprietary research and consulting around quantifying information’s value and defining how to manage information as an actual enterprise asset.[1] This concept stemmed from his work with data warehouse pioneer Prism Solutions (now part of IBM) at which he and his professional services colleagues developed information auditing techniques to validate and qualify and quantify source data quality characteristics and potential business value. These methods were formalized into Prism's commercial ITERATIONS data warehouse methodology still offered by IBM.

The primary principle of infonomics is the recognition of information as an enterprise asset. Although generally accepted accounting principles (GAAP) as yet do not require the reporting of information assets on the balance sheet, infonomics deems that organizations acknowledge that information is more than merely a resource.

While it is generally accepted that information has value when used in decision making or to fuel business operations, infonomics posits that information, just as GAAP-recognized assets, has a definitive value even when not in-use. The accounting definition of a balance sheet asset being an item of ‘’probable future economic value’’ applies as well to information. Information's value can also be determined in terms of its realized value and potential value.

Similar methods for quantifying the value of accepted intangible assets can and should be applied to valuing information assets. These valuation (finance) methods include as applicable and relevant: market approach, the cost approach, and the income approach. As well, non-economic valuation methods that quantify information’s relative value, business process relevance and data quality-related value have application in helping organizations make strategic information-related IT and business decisions.

Although information is not yet a recognized balance sheet asset, organizations should consider it one for internal reporting purposes. This includes an applying valuation methods on a scheduled basis and when a given information's value may be impaired, and internally reporting information asset value on a supplemental balance sheet.

Infonomics valuation exercises typically disclose that information is a vastly underutilized asset and that organizations should consider opportunities to improve their capture and deployment of information in generating top-line and bottom-line benefits. This includes decision-making, business process automation, innovation, and even the packaging and direct marketing the organization’s information assets.

6. Information’s value should be used for prioritizing and budgeting IT and business initiatives[edit]

IT and business related initiatives that leverage or secure information assets should be budgeted against the quantified economic value of the information and the cost to acquire, administer and apply the information. Currently such initiatives tend to proceed without this degree of fiscal diligence.

Traditional physical and financial assets have a definitive lifecyle and procedures for their effective handling throughout. Infonomics principles suggest that organizations should apply their own expertise, policies and practices in asset management toward the management of information assets.

Throughout the 2000s Doug Laney and his colleagues developed and deployed information asset valuation models, information auditing methods, and information asset management practices. In 2010 Laney formed the Center for Infonomics, a non-profit think tank to collaborate on and further the principles and practices, and the associated the Center for Infonomics LinkedIn Group. The same year he began lecturing on Infonomics at leading business schools[5][6][7][8][9][10][11] holding Infonomics workshops[12] and conducting press interviews on the topic.[13]

Dave McCrory, SVP at Warner Music Group authors the DataGravity blog (launched July 2013) in which he has posited a formula for data gravity that considers the size of a data set, and its compression ratio (density), the "application mass" (i.e. memory and disk usage, CPU utilization), bandwidth, latency, and number and size of data requests. He suggests reasons to increase or decrease data gravity along with some uses for it.

Kühne Logistics University offers an academic seminar for PhD students and others on "Intermodal Network Services: Value of Information and Pricing" in which Prof. Dr. Rob Zuidwijk shares his models for assessing the value of information in container transport in terms of efficiency and reliability.

Maastricht University began offering Infonomics in 2000 as a specialisation within economics and business. In 2004 this programme was transformed into an Infonomics specialisation within the BSc Economics and Business Economics and a separate MSc Infonomics. Infonomics at Maastricht University has a focus on the economic and business impact of information, networks and information technology.

American University Info-Metrics Institute offers periodic graduate and post-graduate conferences, workshops and papers on interdisciplinary topics related to the philosophy, economics, and science of information.

Infonomics, a Norwegian firm specializing in interactive marketing and technology formed in 2013

The International Institute of Infonomics was formed in 2000 by Luc Soete to focus on research related to information digitization. Although the institute no longer functions, it was a progenitor of the Maastricht University Infonomics specialisation.